Ch1Solutions

Ch1Solutions - Solutions to EndofChapter Problems Chapter 1...

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Solutions to End-of-Chapter Problems Chapter 1 1.1 Engineering economy will help you pick the most economical alternative from the ones that have been identified. It will not help you identify what the alternatives are. 1.2 Revenues and costs are examples of cash flows. 1.3 The analysis techniques that are used in engineering economic analysis are only as good as the accuracy of the cash flow estimates. 1.4 Evaluation criterion refers to the measurement standard or procedure that is used to determine which alternative is “best”. 1.5 In engineering economy, the evaluation criterion is financial units (dollars, pesos, etc). 1.6 Intangible factors are non-economic considerations that may have to be taken into account in identifying the best alternative. 1.7 Examples of intangible factors are goodwill, morale, convenience, friendship, implementation know-how. 1.8 Interest is a manifestation of the time value of money. 1.9 The most important fundamental dimension in economic analysis is time, because of the time value of money. 1.10 The term that describes compensation for “renting” of money is time value of money, which manifests itself as interest. 1.11
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Ch1Solutions - Solutions to EndofChapter Problems Chapter 1...

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